Refinancing Challenges and the Role of Collateral

Among the changes in the debt capital markets are a growth in longer-term funding, instruments that can hedge against major macro-economic risks and increased use of collateral. Regulatory change, coupled with massive refinancing needs over the next couple of years, is altering the way that banks work, stimulating new financial structures and products. BNY Mellon explores the key aspects driving trends and the emerging new order.

Author:   Rossana Abueva
Business:   Corporate Trust
Publication date:   October 2011

Regulation: New Operating Models Needed

Reprinted with the permission of PEI Media

As new regulations change the way the market functions, private equity must evolve to meet fresh challenges. Daniel Amir and Brian McMahon of BNY Mellon discuss the most significant regulatory requirements impacting both Europe and the U.S. and identify what they mean for private equity practitioners.

Authors:   Daniel Amir, Brian McMahon
Business:   Alternative Investment Services
Publication date:   June 2012

Enhancing U.S. Equity Returns Through a More Balanced Market-Cap Allocation Approach

The Boston Company looks at how institutional investors can seek higher risk-adjusted returns with a broader range of U.S. equity market-cap exposures that includes small and mid-size companies.

Authors:   Michael Arends, Joseph Duffy
Business:   Investment Management
Publication date:   September 2012

Towards a Common Carbon Currency: Exploring the Prospects for Integrated Global Carbon Markets

The global carbon market has grown rapidly in recent years, after a record $63 billion in trading volume in 2007, the first half of 2008 reached $59 billion. We estimate hat a linked global cap and trade market could reach $3 trillion by 2020. This paper analyzes the challenges for market mechanisms to evolve in support of more robust transaction models that lower risk and operational complexity as well as enable greater efficiency. The issues are compounded by numerous standards and unlinked registries in the voluntary market.

Author:   Hozaifa Arsiwala
Business:   Corporate Trust
Publication date:   December 2008

Sovereigns in Search of Solutions: OTC Derivatives Reform: Direct and Indirect Impacts

With the imminent introduction of specific requirements under the Dodd-Frank Act and the European Market Infrastructure Regulation (EMIR), investors continue to grapple with the potential impact of such regulations, especially as some of the rules have yet to take their final form. For sovereign institutions, the evolving regulatory framework holds much uncertainty. Inconsistencies in the application of some key provisions, including the classification of sovereigns and the extent of exemptions to the Basel III capital adequacy rules, must be addressed to avoid market distortions and regulatory arbitrage. One thing, however, is clear: the derivatives business for all investors will change in a very significant way. Specifically, the trading of derivatives and the management of the collateral associated with such trades will be impacted.

Authors:   Jai Arya, Nadine Chakar
Businesses:  Broker-Dealer Services, Collateral Services
Publication date:   June 2012

Portfolio Leverage Ratio

Portfolio leverage can be created through the use of borrowing, through investing the proceeds from short sales or through the use of derivative instruments. Leverage provides investors risk and opportunity. As a leading provider of global risk solutions, many clients are asking BNY Mellon Asset Servicing how we measure leverage as there is no current industry standard. To demystify the concept of leverage, this paper provides a straightforward approach to calculating and monitoring portfolio leverage. Leverage is defined as the creation of exposure greater than the capital invested.

Author:   David Asermely
Business:   Pershing
Publication date:   December 2010

Sukuk Investor Relations - We Cannot Wait Any Longer

Debt capital markets, including the Sukuk market, have lagged behind other financial markets in developing proper IR programmes, but today's information demands mean we cannot wait any longer. A new information model is needed, which must provide investors with a deeper understanding and allow them to manage risk more effectively.

Author:   Giambattista Atzeni
Business:   Corporate Trust
Publication date:   October 2011

Target Surplus Strategies for Defined Benefit Plans

BNY Mellon Pension Services have developed a Target Surplus Strategy that helps defined benefit plans lock in target funding levels within a specific time frame using a dynamic asset allocation approach.

Authors:   Peter Austin, Albert Trezza
Business:   Investment Management
Publication date:   May 2010

Evolution in Risk Reporting: What's Next?

Reprinted with the permission of CFA Institute

The process of measuring, monitoring, and reporting risk has taken on increased importance during the past decade. In particular, the financial crisis of 2008-2009 highlighted the need for portfolio-level and firm-level risk management and hastened the pace of adoption of a formal risk management infrastructure for investment management firms.

Author:   Frances Barney
Business:   Asset Servicing
Publication date:   March 2012

Global Payment Trends for US Institutions and Corporations

The complexities of implementing payment practices worldwide pose challenges to firms doing business globally. Find out how organizations are optimizing their cross-border payments processing.

Author:   Michael Bellacosa
Business:   Treasury Services
Publication date:   February 2010